Millions of Savers at Risk: Life Insurance and PER Money in Jeopardy

It’s difficult to navigate between all the financial product offerings when you want to save. Despite its success, this popular investment remains risky for some savers. We’ll explain it to you.

The different options for savers

When the time comes to save, the French have the choice between many options to protect their capital or to profit from it. The first option for savers is to turn to savings accounts. Easy to access, regulated savings accounts, such as Livret A, provide maximum security for your funds. But their interest rate is relatively low, which can push beneficiaries to turn to other products.

Launched in 2019, Retirement Savings Plans (PER) give savers tax advantages when making payments. They allow individuals to recover their savings in the form of an annuity or capital once retired. There are two kinds: individual PERs and collective PERs. Individuals are intended for employees or self-employed workers. While employers subscribe directly to collective PERs for their company’s employees.

Finally, life insurance is a product very popular with the French. In fact, more than 40% have taken out life insurance. Investors can place their funds in guaranteed, low-risk euro funds. Or in units of account, subject to market fluctuations.

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These savers are not protected

Please note that if you have subscribed to a PER or life insurance, your money does not necessarily benefit from protection. In fact, life insurance contracts do not protect the 18 million French people in the same way depending on their contract! Because the famous guarantee fund of 70,000 euros is not applicable to all saverswe’ll explain why.

Indeed, if the protection of funds of 70,000 euros exists, it is thanks to a guarantee fund called the Personal Insurance Guarantee Fund (FGAP). Banks, insurance companies, mutual insurers and provident institutions supply this organization responsible for guarantee the payment of benefits in the event of failure of the insurer.

The problem is that a essential player missing from this list: mutual societies ! In France, it is more than1.5 million savers who went through mutual insurance to take out a life insurance contract. Knowing that the average amount of these savings is 30,000 euros, an amount that we would not want to see evaporate!

A fund being established

Fortunately, the Unilateral Default Guarantee Fund (FGMU) was created in 2013. Its objective is to protect policyholders in the event of failure of their mutual insurance company. The mutual societies in question are notably Carac, France Mutualiste, Aesio, UMR or Médicis.

But if the legal framework for such a guarantee fund for mutual societies exists, this fund is still being established ! Indeed, the Prudential Control and Resolution Authority (ACPR) declared “ To date, this fund is not able to intervene. » This is why the majority of contracts taken out with mutual insurance companies indicate this absence of guarantee funds.

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The Director of Insurance at the National Federation of French Mutuality deplores the inaction of the General Directorate of the Treasury. Indeed, the numerous requests “so that the fund can finally see the light of day” have remained unanswered. He indicates that “this file is not a priority for the General Directorate of the Treasury”. But one thing is certain, it is for savers.